"We live in a very fast changing world ­ the reality is there is an evolutionary path associated with GSM.  It is difficult to give a commitment that asset impairment in the future [will not be] inevitable," said outgoing President, Gary Barrow.  He was speaking at CWJ's 17th annual general meeting (AGM), which was held yesterday at the Hilton Kingston Hotel in New Kingston.

Mr. Barrow was addressing a shareholder's query which highlighted that for the past two years the company's books have been showing impairment costs.  The shareholder questioned if, going forward, this would be the case with the GSM technology.  Reflecting that there is always a technology risk, the CWJ executive sought to reassure shareholders that "We [at CWJ] believe we have done most of our asset impairment but we can't give a commitment."

EARLY MORNING CONFERENCE

Two months ago, on June 2, the executives of Cable and Wireless Jamaica held an early morning news conference ­ 7:30 a.m. to be exact ­ in which it informed a stunned audience that the company posted a startling $5.3 billion dollar loss for the audited financial year ending March 31, 2004.  The loss, it explained, was a result of the write-off of the company's fixed assets, particularly for the company's outdated TDMA technology.  At the time, senior executives of CW&J anxiously pointed out that the loss was a non-cash item which did not affect headline profits.  But it was hardly good news for shareholders: dividends were not paid.  There was a 12 per cent decline in the company's gross revenues, which dipped to $23.4 billion

At yesterday's AGM, Mr. Barrow defended the company's decision to invest in the now outdated TDMA platform when it first launched its cellular service in the early 1990s.  "At the time [CW&J] invested in TDMA it was the right decision ­ [it was] compatible with our neighbours," he explained.  It was that compatibility, he underlined, which enabled roaming.

His comments underscored that of the Chairman, Leonardo de Barros, who earlier noted, "There are technology changes we have to make in the company."  Mr. de Barros acknowledged, "A number of painful decisions had to be taken.  They were tough but correct decisions.  I believe we are doing the right thing."  Some of these tough decisions included:

No profits

No dividends

11 billion write off of assets

The chairman, however, praised the 243 per cent increase in the company stock price since the last AGM as vindication that shareholders expressed confidence in management's decisions.  "We will continue to move that share price for all of us," he enthused.

Upbeat about the prospects for the future, Jamaica's sole full service telecommunications provider unveiled a strategic three-year plan, which will see the company emphasising the following details and areas:

Branding.  The company plans to strategically position its products, particularly its mobile service.

Marketing and customer focus.  The telecommunications giant plans to engage in proactive public relations and engage in target segmentation.

Community investment through the C&WJ Foundation.

'Sweat' legacy.  The focus would be fixed line expansion and enhancement.

Broadband.  Increased customer penetration.

Mobile.  The company plans to go for growth (from TDMA to GSM).

Customer.  Identified by de Barros as the most important.  The focus he, said would be on customer sales and servicing customers.

But the road ahead will be no cakewalk, as incoming president, Jacqueline Holding, acknowledged.  "Revenues will be difficult ­ [and we will] struggle to get revenue growth," she said.  "We will be looking at each of the segments-we are currently assessing new technologies."  Importantly, she is cognisant that customer service is the way to retain and attract new customers.  She informed the audience that her mandate would be "more about how we do things ­ focusing on customer satisfaction and improving the customer experience."

She continued "It's a difficult equation to manage ­ it' s going to be difficult [because of] the difficult marketplace-regulatory environment and challenging economy."  Her role, she reiterated, would be to "balance the equation."

PROBLEMS

And CWJ's parent company, Cable and Wireless plc is also having problems of its own.  For its audited financial year to March 31, 2004, C&W plc posted a net loss of 237 million pounds with revenues declining by eight per cent from 3.6 billion pounds sterling to 3.3 billion pounds in 2004.  For its first quarter to June 30, revenues declined to 798 million pounds, a nine per cent drop.  The company has also retreated from the U.S. market, selling off its interests in that country and most recently in Japan.  But, an investment analyst at JMMB Securities is not altogether concerned about the parent company's woes.  "They are two different companies.  There won't be a direct effect."  He noted that the Jamaican operations contributed a significant amount to the company's Caribbean operations.

For its unaudited quarter to June 30 there was a four per cent decline in revenues compared to the same period last year.  Revenue for both the fixed lines and mobile segments declined by four and 10 per cent respectively.  But, there was a 31 per cent increase in its net profits, which jumped to $792 million.

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